House Republicans Consider Next Move in Budget Fight

GOP-Led House Won't Pass Senate Plan Without Changes, Boehner Says

By

Kristina Peterson And

Janet Hook

Updated Sept. 28, 2013 11:03 a.m. ET

WASHINGTON—House Republicans hold a rare weekend meeting today to consider their next steps in a high-drama showdown with the Senate over the terms for avoiding a government shutdown that could begin Tuesday.

A bill to fund federal agencies for several weeks, which Congress must approve by midnight Monday to avoid a partial shutdown, has been approved by the Republican-led House. It was then was passed in a different form on Friday by the Democratic-led Senate.

ENLARGE

With three days to go before the federal government is due to run out of money, Senate Democratic leaders hold a news conference on Capitol Hill in Washington, Friday.
AP

That leaves House Speaker John Boehner (R., Ohio) and his Republican conference to make the next move in the legislative volleying. In today's session, Republicans will discuss what provisions they want to attach to the spending bill before returning it to the Senate.

Mr. Boehner has said the House won't approve the Senate plan without making changes, a nod to conservatives in his conference who want to use the moment to delay or limit the new federal health law, often called Obamacare.

Federal agencies will have to suspend many nonessential services and furlough workers on Tuesday, the start of the new fiscal year, unless lawmakers can come to an agreement. The odds of a shutdown are rising as House Republicans and Senate Democrats show no sign of breaking their standoff on whether the spending bill can include provisions relating to the health law.

Today's House Republican meeting is sure to consider a proposal from more than 60 conservative lawmakers to attach a one-year delay of the health-care law to the spending bill. Senate Democrats and President Barack Obama say they will reject any attempt to limit the law.

In his weekly Saturday radio address, Mr. Obama used combative language as he placed the blame on the GOP for the impasse.

"Republicans in the House have been more concerned with appeasing an extreme faction of their party than working to pass a budget that creates new jobs or strengthens the middle class,'' he said. "And in the next couple days, these Republicans will have to decide whether to join the Senate and keep the government open, or create a crisis that will hurt people for the sole purpose of advancing their ideological agenda."

Republicans used their weekly radio address to focus on the next fiscal deadline on the horizon, the need to raise the nation's debt limit in October. Republicans have debated among themselves about which of their policy goals, such as delaying the new health-care law, they should try to attach to the spending bill, and which to link to legislation raising the debt ceiling.

"The president is now demanding that we increase the debt limit without engaging in any kind of bipartisan discussions about addressing our spending problem,'' said Rep. Cathy McMorris Rodgers (R., Wash.), who gave the address on behalf of Republicans. "He wants to take the easy way out—exactly the kind of foolishness that got us here in the first place."

She said the need to raise the debt ceiling presented "a golden opportunity to fix the problems coming out of Washington,'' and that the GOP had proposed pairing the debt ceiling increase with measures approving the Keystone XL pipeline and "fixing'' the tax code and the new health-care law.

Uncertainty is growing about whether lawmakers can bridge their differences on a spending bill by Monday night. On Friday, the Democratic-led Senate approved legislation to fund federal agencies for the first six weeks of the fiscal year and to restore money for the health law that the House GOP had stripped from its version of the spending bill.

The standoff both between the two major parties and within the GOP brings the federal government to the brink of a shutdown with little obvious room for resolution. Unlike in previous showdowns, there have been no major negotiations among congressional leaders or with the White House.

ENLARGE

House Speaker John Boehner, at the Capitol on Friday, doesn't want to alienate conservative lawmakers.
Associated Press

Senate Majority Leader Harry Reid (D., Nev.) on Friday added to the pressure on the House by adjourning the Senate until Monday afternoon, narrowing the window of time for any last-minute legislative volleys between the chambers.

Rep. Matt Salmon (R., Ariz.) said that delaying the health-care law for a year made sense, given that major elements of the law have been delayed, such as a provision imposing penalties on large employers who fail to provide insurance for their workers.

"We think that's fair and reasonable. Close to half of Obamacare has already been delayed," Mr. Salmon said.

Mr. Salmon also said that House lawmakers had met with tea party-aligned Sens. Ted Cruz of Texas and Mike Lee of Utah, both Republicans, on Thursday night to discuss the House's next steps, and agreed to hold out for a one-year delay of the health law. Some 15 House conservatives met with the two senators at a townhouse on Capitol Hill, according to a Republican lawmaker.

The strategy keeps House Republicans on a collision course with Senate Democrats. "We are going to accept nothing as it relates to Obamacare,'' Mr. Reid said after the Senate approved its spending plan.

Impact on Markets, Economy

Some House Republicans signaled that they were willing to affix narrower proposals to the spending measure, such as a repeal of the health law's tax on medical-device sales.

Some also talked of limiting contributions the federal government would make to lawmakers, their staff and certain White House officials to offset the cost of their premiums under the health law.

"It does seem like we're all over the place," Rep. Tom Rooney (R., Fla.) said on Friday.

So far, financial markets have largely shrugged off the budget standoff. But there are signs of growing concern, especially if there is no agreement to raise the ceiling on U.S. government borrowing by mid-October.

In the derivatives market, the cost to insure for a year against a default by the U.S. government has risen sixfold in the past week, and the price of one-month Treasury debt has fallen. But the benchmark 10-year Treasury note has rallied, and the Dow Jones Industrial Average is just 2.7% below its record close. Still, if history is any guide, markets may become more tumultuous as the debt-ceiling deadline nears.

Mr. Obama in past budget and debt negotiations with Republicans has been accused by fellow Democrats of giving ground too easily. He has adopted a more confrontational style in the current budget battle, including comments on Friday in which he complained of "extremists'' and "shenanigans'' in Congress.

Speaking from the White House, Mr. Obama said he wouldn't agree to policy provisions that Republicans plan to attach to budget and debt-related bills, saying new demands would arise in the future with every routine fiscal deadline.

WSJ's Damian Paletta says the lack of movement toward a budget deal is like a formulaic Hollywood thriller – the clock always ticks down to one second as viewers wonder if Republicans and Democrats will cut the wire in time.

"That's why we have to break this cycle … Do not threaten to burn the house down simply because you haven't gotten 100% of your way,'' Mr. Obama said.

Responding to Mr. Obama, Brendan Buck, a spokesman for Mr. Boehner, said: "The House will take action that reflects the fundamental fact that Americans don't want a government shutdown, and they don't want the train wreck that is Obamacare.''

If no agreement is reached by midnight Monday, federal agencies will have to stop providing many services and furlough many employees. Services and agency functions deemed essential would continue.

If House lawmakers alter the Senate's spending bill, the measure will return to the Senate, where legislation can take days to navigate over procedural hurdles.

That is stoking anxiety among some Republicans, who worry that their party will take the greater share of public anger if the government shuts down.

"I do believe Republicans will be blamed," said Rep. Charles Boustany (R., La.). Some House Republicans are more concerned about the prospect of a shutdown than others, he said. "There are some, I think, who would relish a shutdown. I think that's unfortunate," he said.

The stopgap spending bill passed the Senate in a 54-44 vote Friday, along strict party lines. Earlier in the day, it cleared a procedural hurdle, 79-19, with 25 Republicans joining the Democratic caucus to end debate on the bill.

Friday's Senate votes capped a week of procedural theatrics in the Senate, where a faction of tea party-backed lawmakers, led by Mr. Cruz, objected to speeding up some of the chamber's proceedings, to the irritation of veteran lawmakers in both parties. Mr. Cruz and his allies said their delaying tactics were intended to call attention to problems with the health law and to try to eliminate money for it.

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